Help! 18 more years to go

[Helpmeretireearly]

Good Morning All,

I stumbled on this great site and now I’m looking for some much needed help.

Background: 18 years till retirement. Emergency fund is at Max. Wife and I bring home roughly $200k per year. She just started her career. 20 years left on 4% int. rate mortgage. (Owe $240k/worth $475). Both will have SS.

Current Assets:
$290k in a rolled over 401k to a IRA
$44k in Roth
$6k in a Union Annuity (13k per year added)

Non active assets:
$95k in a old company annuity that pays out over 10 years. 9 more years of payouts coming.

Future assets:
Defined Pension: for every year I work I get $245/month into a pension fund. Collectible at 20 years service or sooner at a deduction. Should get 18 years in.

I feel my asset classes are all over the place and possibly over lapping a lot.

IRA (Fidelity) = FBGRX 30%, FCNTX 30%, FOCPX 20% and FXAIX 20%.

Roth (Fidelity) = FBGRX 100%

Annuity (John Hancock) = VFIAX 50% and VIGAX 50%.

It’s very simple....I want to go all in and be 100% growth for now. What would you change if this was your portfolio and had 18 years left to get it right?

Thanks you!!

[ATXFIRE2034]

Are you actively contributing to your Roth or tIRA? I would consolidate all of your investments in tIRA to FXAIX to lower expenses. Target growth in your Roth and max that with contributions if not already doing so.

[MBAustin]

Welcome, Helpme!

18 years is a long time in investment terms. I'll let folks familiar with Fido funds comment on your specifics, but personally even 18 years out I was 10-20% in fixed income. Since your wife just started her career, I assume you were living on one income, so the key is to keep doing that and invest all of her income, as much in tax-advantaged accounts as possible.

Keeping your spending in check with the higher income is tough for some people, but if you can do that you should be in great shape in 18 years.

[pj.mask]

Careful about relying on pension. That’s a large sum - ripe for cuts/bankruptcy.. also many people at my old company banked on their pension - few stay long enough to reach max benefits.

[jollystomper]

Quote:

Originally Posted by pj.mask Careful about relying on pension. That’s a large sum - ripe for cuts/bankruptcy.. also many people at my old company banked on their pension - few stay long enough to reach max benefits.

+1

18 years before I was eligible for retirement I had a great pension. Ten years before my retirement eligibility Megacorp changed the rules and my projected pension was reduced by 1/3. I was one of the lucky ones as those under a certain age and years of service lost them completely. 2 years before I was eligible for retirement Megacorp froze the pension so no more growth. So consider modelling your retirement without the pension and plan accordingly.

[Helpmeretireearly]

Yes any pension is on risky ground that’s why I’m here asking how to accumulate as much net worth I can in the next 18 years. On another note it would take the NY state to file bankruptcy and re-write contracts for the pension I have to become solvent.

Anyways yes I still plan to find the Roth to the Max and also fund the IRA for $5200 per year.

I was looking for more detailed funds or classes that you guys feel I should be in. I have a meeting with a Fidelity advisor next week also but wanted some other non biased opinions.

Thanks!

[ATXFIRE2034]

FSPTX...I just put $105k in yesterday but I'm extremely bullish on the tech sector and similar to yourself I have time on my side so I can afford the risk.

[Dtail]

Quote:

Originally Posted by jollystomper +1 18 years before I was eligible for retirement I had a great pension. Ten years before my retirement eligibility Megacorp changed the rules and my projected pension was reduced by 1/3. I was one of the lucky ones as those under a certain age and years of service lost them completely. 2 years before I was eligible for retirement Megacorp froze the pension so no more growth. So consider modelling your retirement without the pension and plan accordingly.

Yup.
That is why hopefully I will take my small pension as a lump sum in 2025.

[HI Bill]

Welcome! A whole lot can change in 18 years. Since different asset classes outperform each year, or at least each several years, being wholly in growth stocks may drag your returns down, especially from where we sit now.

Check out this thread for an idea of how often different asset classes outperform:
http://www.early-retirement.org/foru...-a-101690.html

Even if you neglect bonds (which I would with your retirement horizon), having some broad based international exposure might provide some better diversification . Since Large Cap funds / growth funds have had such a run-up recently, small, mid-cap, and value funds may eventually catch up. Or not. Just be ready to stomach a large downturn, for it will eventually occur. Don't panic and sell!

What's your savings rate?
What are your current ages?
Are you maxing out the 401(k), then the ROTH IRA?



Best wishes!

[SnowballCamper]

Quote:

Originally Posted by Helpmeretireearly It’s very simple....I want to go all in and be 100% growth for now. What would you change if this was your portfolio and had 18 years left to get it right? Thanks you!!

I would do everything in VTI and VXUS (to go all in and be 100% for growth), a bit heavier in VTI. I'm sure fidelity has comparable funds, if you like them.

[Helpmeretireearly]

-Savings rate is kinda in limbo right now due to the union job that has a fully funded defined pension plan and an annuity.

-I’m currently funding 1 Roth IRA in full and plan to start the 2nd one next month.

- Age is 43, no 401k available.

- Been thru the dip of 2001 and 2008 and was fine.

Thanks for all the input so far!

Quote:

Originally Posted by HNL Bill Welcome! A whole lot can change in 18 years. Since different asset classes outperform each year, or at least each several years, being wholly in growth stocks may drag your returns down, especially from where we sit now. Check out this thread for an idea of how often different asset classes outperform: http://www.early-retirement.org/foru...-a-101690.html Even if you neglect bonds (which I would with your retirement horizon), having some broad based international exposure might provide some better diversification . Since Large Cap funds / growth funds have had such a run-up recently, small, mid-cap, and value funds may eventually catch up. Or not. Just be ready to stomach a large downturn, for it will eventually occur. Don't panic and sell! What's your savings rate? What are your current ages? Are you maxing out the 401(k), then the ROTH IRA? Best wishes!

[NgineER]

Quote:

Originally Posted by Helpmeretireearly -Savings rate is kinda in limbo right now due to the union job that has a fully funded defined pension plan and an annuity.

It boils down to income vs expenses. If you have issues with savings now pulling in $200k, you will have to invest very wisely to come out ahead in the long run. If your wife just started her career, you should try to keep living on one salary while banking the second. That is how you truly get ahead. Might seem harsh, but there has to be some pain for some gain unless you are really lucky.

[GoBears]

60% in FSKAX - Total Stock Market Index Fund
15% in FTIHX - Fidelity Total International Stock Index
25% in FXNAX - Fidelity USBond Index Fund

Rebalance back to these ratios once a year. As you get older, consider increasing your bond allocation. Over 18 years, an index fund portfolio will exceed the performance of most actively managed portfolios. Reasons - fund expenses are much less with index funds and likelihood of any actively managed fund exceeding the index decreases the longer the fund is held. Including bonds helps reduce volatility and ensures you have funds to invest when you rebalance and stocks are on sale because prices have dropped.

You might want to look at Bogleheads.org, which has a lot more info on index investing.